Northampton County makes arena tax zone opposition official

Council votes 5-4 to send letter to state asking for law authorizing tax district to be repealed.

May 03, 2012|By Samantha Marcus, Of The Morning Call

The Northampton County Council on Thursday formalized its condemnation of a special Allentown taxing district designed to help build a hockey arena in center city.

The board voted 5-4 to send a letter calling on the governor and Legislature to repeal a law creating the neighborhood improvement zone, a unique taxing district in which all state and local taxes except property taxes are kicked back to pay off debt.

The language in the resolution approved Thursday argues that areas outside the zone will be harmed in their ability to compete with subsidized commercial and office space in the tax zone.

"It is the opinion of the Northampton County Council that the Allentown NIZ creates an unfair economic advantage in the Allentown NIZ, the benefits of which accrue to the city of Allentown, to the detriment of other municipalities throughout the Lehigh Valley," it reads.

While acknowledging the limited influence of a letter, board President John Cusick said the board is charged with making its opinions known. The opinion the majority delivered loud and clear Thursday is that the NIZ is a powerful tool that will benefit Allentown at the expense of Northampton County.

Cusick said he was concerned that — given statewide cuts to education, farmland preservation and human services — the state would divert money to a hockey arena and a single neighborhood.

Board members were especially frustrated that the NIZ legislation, for as much as they disagree with it, was crafted exclusively for Allentown when other communities could benefit from a similar tool.

"If you are going to create this type of legislation, the least you can do," Cusick said, is let other communities avail themselves of it.

The board cautioned against subsidized rents within the NIZ depressing property values outside its reaches and for developers within it poaching businesses from elsewhere in the valley.

Developer J.B. Reilly and Sarah Hailstone, Allentown's director of community and economic development, spoke of the need in Allentown for the tax zone, but also of its limitations.

The zone itself is 130 acres, not large enough to have "a material impact" on the Lehigh Valley real estate market, Hailstone said. But it's the drastic spark Allentown needs to overcome challenges to redevelopment.

Reilly, saying he felt compelled to correct rampant misinformation, reiterated that rent for office space won't drastically undercut existing properties; the number of potential sites for new office space downtown is modest; and no tenants are relocating from inside the valley.

"There's so much misinformation and so much exaggeration that unfortunately it's hurting this process," he said.

Voting in the minority with Peg Ferraro, Ken Kraft and Scott Parsons, Councilman Lamont McClure suggested the board let current litigation and negotiations play out.

"I don't want to see this thing die, but I want to make sure we're being treated fairly," Parsons said.

Hanover and Bethlehem townships in Northampton County have filed a lawsuit to fight the law, which could require them to forfeit earned income tax revenue from their employees who work in the zone. Four municipalities have joined the lawsuit as intervenors and eight more are awaiting court approval to join as intervenors. Upper Macungie voted Thursday to join them.

Council Member Barbara Thierry questioned why Northampton County doesn't do the same.

"We have an interest here, but I don't know if we have an interest where we take the rifle out and start shooting," Executive John Stoffa said.